Pranav B Prem

In a significant ruling, the National Company Law Tribunal (NCLT), Amravati Bench, has held that a successful bidder cannot seek reliefs, concessions, or waivers that are not explicitly provided for in the auction sale documents. The Tribunal emphasized that bidders are bound by the terms of the sale, and post-sale claims for additional benefits not mentioned in the e-auction process document are impermissible.

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The Bench comprising Shri Umesh Kumar Shukla (Technical Member) and Shri Kishore Vemulapalli (Judicial Member) dismissed an application filed under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 (IBC), which sought cancellation of a concluded sale and refund of the bid amount of ₹7.58 crore, on the ground that the Liquidator allegedly failed to obtain waivers and concessions necessary for completing the transaction.

The Applicant, M/s Indian Renewable Energy Development Agency Ltd., had been declared the successful bidder in the auction process for the corporate debtor's assets. However, the Applicant later failed to fulfil essential post-bid obligations, including payment of GST, stamp duty, and interest for delayed payments, in addition to the balance sale consideration. Consequently, the Liquidator forfeited the amount already paid and did not proceed with executing the sale deed.

The Liquidator submitted that the terms of the e-auction process document clearly stated that default in payment of the balance sale consideration, statutory dues, or failure to fulfil any other mandatory conditions would lead to disqualification and forfeiture of the deposited amount. It was further contended that the Applicant was fully aware of these terms and had accepted them unconditionally while participating in the bidding process.

In its analysis, the Tribunal held that the Applicant could not later claim reliefs or concessions that were not included in the auction sale terms. The Tribunal reiterated that a sale under liquidation is conducted on an “as is where is” basis, and the bidder cannot be permitted to retrospectively demand benefits not disclosed at the time of auction. The Tribunal observed: "If the Liquidator or the tribunal were to grant post-sale reliefs or benefits not expressly laid out in the sale documents, it would result in unequal treatment of bidders and undermine the transparency and finality of the process."

The Bench further clarified that the responsibility for completing the sale, including payment of statutory dues, lies entirely with the successful bidder, and non-compliance cannot be blamed on the Liquidator. Since the Applicant had defaulted in making full payment, including GST and stamp duty, it could not insist on cancellation of the sale and refund of the deposited amount. The forfeiture by the Liquidator was found to be in line with the express provisions of the e-auction terms.

In rejecting the Applicant’s argument that the Liquidator was required to file an application before the Tribunal seeking reliefs and concessions, the Tribunal noted that no such obligation existed in the sale terms, and failure to do so did not vitiate the auction process. Reliefs and waivers must be explicitly provided in the sale notice or documents; otherwise, bidders cannot claim them after being declared successful.

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Highlighting the importance of financial discipline and transparency, the Bench concluded that permitting post-auction reliefs would give the successful bidder an unfair advantage and distort the integrity of the insolvency resolution process. Accordingly, the application was dismissed, and the sale process, along with the forfeiture of the paid amount, was upheld by the Tribunal.

Appearance:

For Liquidator :Mr. Charudutt Marathe

For Applicants :Mr. Venkat Challa, Adv,Mr. Amir Bavani

For Respondents :Mr. Amir Bavani, Adv, Mr. Maharshi Viswaraj

Cause Title: M/s. Indian Renewable Energy Development Agency Limited V. M/s. Saradambika Power Plant Pvt. Ltd.

Case No: IA (IBC)/153/2025, IA (IBC)/99/2025, IA (IBC)/104/2025, IA (IBC)/401/2022 & IA(IBC)/224/2022 IN CP(IB)/4/7/AMR/2021

Coram: Shri Umesh Kumar Shukla [Technical Member], Shri Kishore Vemulapalli [Judicial Member]